Share repurchase refers to the behavior of a listed company to use cash or other means to repurchase a certain amount of the company's outstanding shares from the stock market. The company can cancel the repurchased shares after the repurchase is completed. However, in most cases, the repurchased shares are retained by the company as "treasury shares", which are no longer part of the issued and outstanding shares and do not participate in the calculation and distribution of earnings per share. The treasury shares can be used for other purposes, such as issuing convertible bonds, equity incentives, etc., or sold when funds are needed. In our general understanding of stock repurchase should be simply "cancel the repurchased shares".

Companies buy back their own shares mainly for the following three motives:

1, to strengthen their own controlling interest to prevent being annexed by other companies. For example, in the 1980s, the United States and Japan amended the Companies Act in order to facilitate the repurchase of their own shares to increase the controlling interest.

2. Maintain or increase the level of earnings per share and stock price to increase the value of their own stock. The liquor companies mentioned above may be doing so as they move to buy back their own shares at a time when stocks in the liquor industry are being sold off heavily by the market.

3, recapitalization. That is, large-scale debt used to buy back shares or pay special dividends, thus rapidly and significantly increase the proportion of long-term debt and financial leverage, optimize the capital structure. Recapitalization tends to appear in the competitive position is quite strong, operating into a stable growth stage, but the long-term debt ratio is too low. And the current liquor industry fits these characteristics.

In short, my personal stock buyback companies are cautiously welcome attitude, but the company's motivation for buyback must be clear, do not be those "show" company deceived.